Telecoms firms must let phone and broadband customers leave FOR FREE if they hike prices

Telecoms firms that hike prices on telephone, mobile or broadband services will have to let mid-contract customers leave without charge under new rules announced today.

Regulator Ofcom is asking companies to be ‘clear and upfront’ about potential price rises and the customer’s right to cancel if costs do go up.

Ofcom hopes the new rules, which are
still subject to consultation, will help ‘address consumer concerns that
it is unfair that providers are currently able to raise prices, while
they themselves have little choice but to accept the increase or pay a
penalty to exit the contract.’

Ofcom is also proposing that firms are clear about future rises so that customers can make an informed choice when signing up.

Customers have been hit by a number of hikes in the last year, with all of the five biggest mobile firms – Vodafone, Three Mobile, T-Mobile, Orange and O2 – imposing price hikes on customers (see right).

Landline and broadband customers have also be subjected to hikes from big firms, including, Sky, BT and Virgin Media.

In September, Orange faced a barrage of complaints from customers when it decided to
withdraw its free broadband for customers unless they took out line
rental from the company.

The mobile operator announced in
August it would cut free home broadband for up to 90,000 mobile
customers unless they forked out the £160.50 a year for a landline.

The phone provider faced backlash
from customers, with many threatening legal action because they argued
they were not informed it was a time limited offer.

The company has now partially
back-tracked on the change by offering to cover the difference if the
cost of the new landline contract is more than their existing one.
However, customers still have complain to Orange before they will do
this.

A campaign by consumer group Which?,
supported by This is Money, called for fixed contracts to remain fixed.
Ofcom said that it had thought about imposing a ban on mid-contract
price rises but that this may infringe European law.

'The mobile phone companies should see the writing on the wall, bring in these changes now and start playing fair with their customers without waiting for the regulator to rewrite the rules.'

All change: When Orange withdrew its free broadband for customers it faced a barrage of complaints.

Between September 2011 and May 2012 Ofcom received 1,644 complaints about changes to terms and conditions, with many consumers saying they were not made aware of potential for a price rise in what they believed was a fixed contract.

Claudio Pollack, Ofcom’s consumer group director, said: ‘Many consumers have complained to us that they are not made aware of the potential for price rises in what they believe to be fixed contracts.

‘Ofcom is consulting on rules that we propose would give consumers a fair deal in relation to mid-contract price rises.’

The consultation on the rules closes in March and Ofcom said it expects to publish its decision in June this year.